Clearwire Deal Caps Impressive Year for Sprint Nextel

Sprint Nextel (NYSE: S) has reached an agreement to buy out Clearwire (NASDAQ: CLWR), a high-speed wireless Internet provider whose vast network will give Sprint a leg up in the hypercompetitive telecommunications industry.

Sprint Nextel already owned a majority stake in Clearwire, and will now own the entire company. Already the third-largest wireless carrier in the U.S., Sprint’s $2.1 billion Clearwire purchase gives it by far the most “spectrum” of any company in America.

Spectrum is a technical term for the invisible airwaves over which wireless signals travel. Owning the most spectrum in the U.S. should help Sprint gain some ground on America’s top two wireless providers, AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ).

With a $16 billion market cap, Sprint still trails those two telecommunications giants by a wide margin. AT&T and Verizon are both valued at well over $100 billion. Sprint is unlikely to catch either of those industry leaders anytime soon.

But that doesn’t change the fact that it has been a remarkable year this once down-and-out company.

Sprint Nextel shares have returned a whopping 137% in 2012 – the third-biggest gains among large-cap stocks this year. While the company still hasn’t turned a profit in years and nearly went bankrupt at one point, Sprint now has the backing of Japanese technology giant SoftBank, which in October bought a 70% stake in Sprint for the hefty sum of $20.1 billion.

With Japan’s third-largest wireless carrier now footing many of its bills, Sprint suddenly has the clout to make acquisitions of its own. The Clearwire deal positions the company well for future growth.

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